General research shows the cost of car insurance went up by a significant 58% over the past 12 months. The average cost of a comprehensive car insurance policy is now £924.
Drivers aged 18, for example, paid £2,999 for their policy, on average – more than triple the national average. It’s also £1,415(88%) more than a year ago. This is the most expensive age for car insurance.
This is the seventh annual price rise in almost 2 years.
One of the reasons for this may be because of the continued rise of electric vehicles which means an increase in expensive, technologically advanced cars. Registrations for battery electric vehicles have increased by almost 35% compared to last year. And with some manufacturers stating that they’re only going to make electric vehicles in future, it’s likely this will continue to rise. That’s despite the prime minister’s announcement that the ban on selling new petrol and diesel cars will be delayed until 2035.
These electric vehicles come with a higher price tag and enhanced technology, so cost more to repair after an accident. Also, the supply chain is still feeling the effects of the pandemic. So there are often delays and backlogs for electric vehicle repairs.
The expense of electric vehicles has led many drivers to turn to second-hand cars. Because of this, they’re keeping their value for longer. This means more expensive claims for insurers if the car is a write off after an accident. This pushes up insurance costs for drivers.
Insurers say the main culprit is inflation. Rising energy bills and the higher cost of paint and materials have added to the cost of repairs, which have increased by 33 per cent, according to the Association of British Insurers. Courtesy car costs are increasing by around 30 per cent, while inflation has also pushed up the cost of personal injury claims.
Add to that an overall increase in claims frequency following the pandemic, and it could explain why car insurance costs are so high.
The cost of living crisis has seen insurance fraud explode. Motor insurance fraud was the most common type of opportunistic fraud referred to the City of London Police’s Insurance Fraud Enforcement Department between March 2022 and April 2023.
Car insurance is fast becoming one of the most expensive household bills, adding more financial pain at a time of high inflation and surging mortgage rates and rents.
If you’d like to call us to see if we can provide a better quote on your car insurance, please call us on 01256 463090 or visit our website Speak to an Insurance Expert | Bloomhill Insurance Solutions (bloomhills.co.uk).